Danaher Stock Surges on GE Biopharma Deal

DHR will pay $21.4 billion for GE Biopharma

Danaher stock was on its way up Monday following news of a deal to acquire General Electric’s (NYSE:GE) Biopharma business.

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Danaher (NYSE:DHR) notes that this deal will have it spending $21.4 billion in cash to acquire GE Biopharma. The company also points out that the net price of the deal will be $20 billion after taking into account for tax benefits.

The good news for Danaher stock is that the company is expecting great things from GE Biopharma. This includes revenue of about $3.20 billion for 2019. It also says that 75% of this revenue is expected to be recurring.

Other good news for Danaher stock is what the deal will do to its earnings. The company is expecting the acquisition to be accretive to its earnings per share in the first full year following the close. It believes that this will increasing earnings per share for that year by 45 cents to 50 cents.

The GE Biopharma business is part of the company’s GE Life Sciences division. When the deal with Danaher closes, GE Biopharma will become part of that company’s own Life Sciences division. It will continue to operating as a stand-alone company once the deal is complete.

Danaher and General Electric are expecting the deal for GE Biopharma to close during the fourth quarter of 2019. However, it will first need to get approval from regulators and complete other customary closing conditions.

DHR stock was up 7% and GE stock was up 8% as of noon Monday.

As of this writing, William White did not hold a position in any of the aforementioned securities.